Court gives preliminary approval to $120 million Aetna settlement of Ingenix claims
By Legal & Regulatory Affairs staff
A federal court in New Jersey has given preliminary approval to Aetna’s $120 million Ingenix settlement that we announced last December. The court has set March 28, 2014, as the deadline for eligible psychologists and other class members to submit their claims under the settlement.
As we have done with prior class action settlements, once more information on the claims process becomes available in the next few months — and well in advance of the deadline — the APA Practice Organization (APAPO) will provide guidance in the PracticeUpdate e-newsletter to help psychologists verify their eligibility and file claims. In general, psychologists are eligible to participate in the settlement if they provided out-of-network services to Aetna subscribers at some time during the period from 2003 to August 2013.
The court has set the following timeline leading up to the March 28 claims deadline:
- Dec. 28, 2013 — notice of class action settlement and claim form mailed to prospective class members and posted on the Internet; notice also to be published in national media.
- Feb. 26, 2014 — Deadline for requests to be excluded from the settlement and objections to the settlement.
- March 18, 2014 — Hearing where the court will consider granting final approval to the settlement after hearing objections to the settlement.
We expect that the court is likely to give final approval to the settlement because it has already considered and rejected many of the arguments against the settlement.
There is often a long delay in class action settlements from when they are first announced, to claims submission, to when the settlement administrator mails checks to claimants. This settlement suffered more than half a year of additional delay because the original judge announced at the initial settlement hearing that he was insured by Aetna. The judge recused himself due to conflict of interest, and the case had to be transferred to a new judge.
Last December, Aetna agreed to a proposed $120 million settlement of a class action lawsuit filed by psychologists, other health care professionals and patients in federal court in New Jersey. APAPO collaborated on the lawsuit with the New Jersey Psychological Association (NJPA), a named plaintiff, since 2009.
The lawsuit alleges that Aetna used a faulty database and underpaid claims for services delivered by out-of-network (OON) providers. According to the lawsuit, the Ingenix database that Aetna licensed to determine payment for OON services consistently understated “usual, customary and reasonable” (UCR) rates that are used as the basis for OON payment amounts — for example, 80 percent of UCR. The UCR is supposed to represent the “going rate” that health care professionals charge for their services in a particular geographic area of the country.
Under the settlement, clinicians will simply need to attest that they were paid as OON providers for Aetna in any year(s) from 2003 to the present in order to claim monies from a “general” settlement fund. Eligible providers who opt to provide more detailed, claims-specific information will be entitled to receive payment from a “prove-up” fund also established as part of the settlement. In addition to health care professionals, Aetna subscribers are considered “class members” who also will be eligible to receive payments, pending final settlement approval.
Aetna, United HealthCare, which owns Ingenix, and several other insurers agreed in 2009 to stop using the Ingenix database pursuant to settlements with the New York attorney general.